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Commerzbank in major job cutting spree

Commerzbank has firmed up plans to lay off nearly 5,000 people, Bloomberg reports. According to a letter by German labour union Verdi, the majority of these job cuts – around 3,000 – will be across the bank’s branch network at home in Germany.

Another 1,900+ jobs will be eliminated outside Germany and across Commerzbank’s subsidiaries, according to the letter seen by Bloomberg.

And yet, Commerzbank’s CEO Martin Zielke (he became the bank’s chief exec in May this year) has pledged commitment to the domestic branches, saying they are still key to the bank’s strategy. The strategy is to onboard two million new clients by 2020. Zielke said around 1,000 branches will be kept regardless of the looming job cuts.

This is the biggest overhaul by the German banking giant since its bailout in 2008.

Overall, Commerzbank plans to cut a total of 9,600 positions by 2020 – or about “one in five jobs” – Bloomberg reports. Other cost-cutting measures include suspending dividends and selling off parts of its securities trading business.

But that’s not all. “After that, it will consider eliminating another 3,000 jobs, according to the letter,” Bloomberg says.

At the same time, it will hire 2,300 staff to work on the bank’s digitalisation efforts.

By the time all these changes come into effect, Commerzbank will be no larger in size than it was before its €9 billion takeover of Dresdner Bank in 2008.

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